Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Stevenage Borough Council
(NT 10)

SUMMARY

The first generation of new towns were arguably
the most successful examples of social engineering in the 20th
century. They demonstrated what could be achieved by robust national
land use and planning policies, proactive economic development
and a strongly community based Council administration. The London
ring new towns today represent the best option on which to concentrate
residential and economic development in the South East and Eastern
Regions. But in order that they can fulfil this role, they require
urgent and decisive action. In particular Government must recognise
that:

 new towns have the potential to be
the major economic drivers in their region and are the appropriate
location for expansion to meet future housing need; however

 they have been systematically asset
stripped over a 20 year period by English Partnerships and the
former Commission for the New Towns in order to meet Treasury
targets; and

 as a direct consequence of disinvestment
and lack of Government attention, they now face substantial and
unique physical, social and environmental problems.

In order to redress this situation, urgent Government
action is required to:

 provide an integrated and coherent
system of social administration by designating the new towns as
unitary authorities;

 review the way Standard Spending
Assessments are calculated for the new towns;

 invest capital funds in the new towns
now in order to meet the physical regeneration requirements of
their town centres, neighbourhood centres, housing stock and public
buildings;

 provide additional social regeneration
funds to ensure continuity of area based initiatives such as the
SRB programme and widen their remit to underwrite a more comprehensive
town-wide neighbourhood renewal programme;

 transfer the remaining English Partnerships
assets in the new towns to the appropriate local authority, preferably
free of any obligations but failing this with an arrangement for
clawback by the Treasury on disposal;

 pending completion of the transfer
of assets a major proportion of the income from sales of EP assets
should be directly reinvested in the new towns from which it has
been derived- the RDAs do not represent an acceptable intermediary
for this process.

BACKGROUND

The London ring new towns developed out of the
1944 Abercrombie Plan for the regeneration of London. Eight "first
generation" new towns were created around London up to 1950.
Development took place from the 1950s onwards by Development Corporations
specifically set up for that purpose. The aim was to create good
living and working environments that would attract investment
and facilitate continuing economic health. The new town movement
is arguably the most successful example of social engineering
of the 20th century and the towns represent relatively prosperous,
well-developed communities.

Stevenage was designated a New Town in 1946
and underwent significant growth from the 1950s to the 1970s,
with residential areas of largely public housing developed on
the neighbourhood principle, a fully pedestrianised sub-regional
shopping centre and a large industrial area with a strong manufacturing
base. When first built, the town was a model of good practice,
attractive and successful and the envy of surrounding towns, but
today it faces substantial physical, social and environmental
challenges.

Stevenage Development Corporation had high levels
of funding from Central Government but little accountability to
local people. When the Corporation was wound up, its role was
passed to the Borough Council, with increased accountability,
but Government funding was withdrawn leaving the town with a deteriorating
physical and social infrastructure and no means of funding renewal.

CURRENT ISSUES

Unitary Local Government

Since the winding-up of the Development Corporation
the social administration of the town has been delivered through
two tier local government. In 1993 the Council presented a strong
but ultimately unsuccessful case to the Local Government Commission
for the town to be designated a unitary authority. This case was
based on the towns clearly defined boundaries and consistent urban
form; the wish to provide a "one stop shop" for all
local government services; the positive "can-do" approach
to physical and economic development inherited from the former
Development Corporation; and the subsequent experience of community
leadership, co-ordination and partnership established by joint
working with the private and voluntary sectors. The case for unitary
status is even stronger today, and the Council's determined efforts
to establish a Local Strategic Partnership are, in part, evidence
of its commitment to fulfil its role as a "unitary authority
in waiting".

The Regional Role

The new towns have the potential to be the major
economic drivers in their region. They have strategic advantages
over traditional locations in attracting inward investment, relating
in the main to advanced infrastructure, access to modern communications
systems and the positive approach to development of their local
authorities. Stevenage in particular has a strong representation
of leading-edge companies in the aerospace and life science sectors.
It also has a growing representation of SME's as a direct result
of the local authority working in partnership with larger firms
to promote a raft of initiatives to stimulate business start-up,
growth and innovation. But this success has been hard fought in
the face of cyclical and structural changes in the local economy
particularly associated with the decline in manufacturing and
the defence related industries. During the early 90s, Stevenage
lost over 6,000 jobs from the local economy and had to redress
this without assistance from Government agencies.

The London ring new towns are also the appropriate
location for expansion to meet future housing need in a sustainable
way in line with recent planning guidance (PPG3). This is because
of their position in relation to the capital, the existence of
relatively accessible shopping and employment areas and the existing
pattern of neighbourhood development which is readily transferable
to new urban extensions. These factors have led to the designation
of an area immediately to the west of Stevenage as a strategic
housing allocation in the 1998 Hertfordshire County Structure
Plan. Applications for planning permission for up to 5,000 new
homes, 3,600 to be constructed before 2011, are currently under
consideration by the Council. Despite efforts by the current County
Council administration to change their policy, the Borough Council
considers urban extensions to the new towns are a correct response
to Government policy.

The Financial Regime

As a first generation New Town, Stevenage has
a range of inherent factors that generate a need to incur higher
levels of expenditure than would be the case for other Shire districts.
These factors in particular relate to areas such as infrastructure
and asset maintenance issues; extensive leisure facilities; neighbourhood-based
community facilities; extensive urban green spaces; and inherited
discretionary spend pressures.

Despite repeated lobbying over the years, these
factors have not been taken into account in the distribution of
central government resources through the local government finance
system. Some elements of the pressures facing New Towns may emerge
through the general indicators used in the calculation of Standard
Spending Assessments, but the overall issue of the special characteristics
of New Towns have been ignored. For authorities such as Stevenage,
the SSA calculation remains a crude, population-based measure
that is an inadequate assessment of the actual need to spend.

The situation is exacerbated for Stevenage specifically
in that it is a tightly bounded urban shire district. Consequently,
the Council, and the town itself, provides services to a rural
hinterland population that is included in neighbouring district
council areas. These authorities then obviously receive the council
tax income and grant distribution associated with this population.
Comparisons with other local authorities indicate that Stevenage
Borough Council provides services commensurate with a larger population,
say, 130,000.

In addition, since the national pooling of business
rates was introduced in 1990, the local government finance system
has not recognised the Council's need to provide services to maintain
the sub-regional employment base within the town, redistribution
of Business Rates to local authorities being purely population-based.

Discretionary funding sources, particularly
those which rely on deprivation indicators, tend to be skewed
against new towns and are also subject to a pattern of changing
rules and, moreover, are limited to one or two neighbourhoods,
whereas more general intervention is warranted.

Government should recognise the need to invest
capital funds in the first generation new towns now in order to
prevent decline and the need for higher investment in the future
and should review the way SSAs are calculated for the new towns.

The Maintenance Deficit

As a direct consequence of the financial regime
referred to above, lack of specific Government aid and systematic
disinvestment (see later) the new towns have accumulated a substantial
maintenance deficit which is manifested in:

 Deteriorating infrastructure, all
of which was built at the same time and is now in need of replacement,
ie mains services installations, unadopted sewers, private roads,
car parks and recreational parks.

 An accumulating maintenance burden
for replacement of public buildings of poor quality, system built
housing and other non-traditional built housing.

 Town centres and local neighbourhood
centres characterised by tired infrastructure and a generally
shabby urban realm.

 The sheer scale of routine maintenance
problems arising from large acreages of grass verges and open
spaces, paths, playing fields, woodland and large numbers of road
side trees.

In Stevenage, the issues outlined above have
led to substantial liabilities in relation to its public buildings.

Leisure Buildings were surveyed in 1997-98 (prior
to the transfer to an arm's length company) and found to have
a maintenance backlog of about £2.2 million. This survey
excluded the Swimming Pool due to its impending refurbishment,
which subsequently cost a further £2.5 million. The Council
has had to fund all of this from its own resources. Other operational
and non operational buildings ranging from Civic Offices through
commercial premises to community buildings were surveyed in 1999
and showed a maintenance deficit of £6.7 million at today's
prices. This figure increases to over £13 million when estimates
are added for car parks, external areas, works to sewers, garage
compounds and external plays areas. Of this, the Council is struggling
to cover barely one half from its own resources within a five-year
programme.

Currently some 8,500 Council homes fall short
of the Government's own "Decent Homes Standard". The
stock condition survey in 2000 showed that the backlog of repairs
to all the stock required a ten-year investment of £60 million.
Of that, £40 million alone is required to bring all dwellings
up to Decent Home Standard. At the current level of Council resources
available, this would take between 18 and 20 years to achieve.

By way of further illustration of how the Council
depends on its own resources, the first full year of improvements
to the stock will cost over £7.5 million. Of that, only about
£2.5 million is funded from the MRA (major repairs allowance).
The rest is funded from capital receipts.

Virtually all the Council's Capital resources
are therefore committed to meeting the maintenance deficit left
by its new town heritage and it is almost impossible to fund new
capital projects and new or replacement buildings. The Government
should make capital funds available for investment in the new
towns now, in order to meet the physical regeneration requirements
of their town centres, neighbourhood centres, housing stock and
public buildings.

Promoting Social Inclusion

The breakdown of the extended family network
when newcomers relocated from London to the new towns in the 50s
and 60s has been well documented. During the 80s and 90s this
process of fragmentation has continued in some areas with the
nuclear family being replaced by concentrations of non-traditional
family units, single parent families etc. This has resulted in
weakened community networks and greater dependency on the welfare
services for support. Stevenage has amongst the highest rates
of teenage pregnancy in the Eastern Region (23 per 1,000 in 1996-97),
it ranks 49th out of 366 districts for lone parents and has low
rates of educational attainment at GCSE.

The Council has addressed these problems by
working in partnership with the public, private and voluntary
sectors to stimulate community activity and provide support for
local organisations. This process is being continued today through
the establishment of a Local Strategic Partnership for the delivery
of mainstream services within the framework of an evolving Community
Plan.

Analysis of social exclusion at the neighbourhood
level tends to mask the pockets of acute deprivation and disadvantage
which exists within some of them. Two wards are in the top 10
per cent of the Index of Multiple Deprivation for the Eastern
Region, and these problems are being successfully tackled by an
SRB5 programme but long term social planning is hampered the current
lack of certainty over continuity funding. Moreover acute problems
also exist in pockets elsewhere in the town for which no comparable
programmes exist. Notwithstanding the Council's commendable track
record (past Beacon for Community Safety and currently shortlisted
for Neighbourhood Renewal) the current allocation of resources
for neighbourhood renewal is inconsistent and arguably socially
divisive.

Government must provide additional social regeneration
funds to ensure continuity of area based initiatives such as the
SRB programme and widen their remit to underwrite a more comprehensive
town-wide neighbourhood renewal programme

The Development Agencies

The Commission for the New Towns (CNT) was established
to take over and manage the assets of the New Towns in England
and Wales, on the wind-up of the Development Corporations. With
the advent of the Government's privatisation policy in 1979, the
CNT was charged with undertaking an accelerated and expanded disposals
programme of its commercial and industrial property to raise capital,
reduce the public sector borrowing requirement and extend private
ownership. CNT completely ignored its social responsibilities
and provided no assistance in dealing with the fragile economy
it left behind.

Following a reorganisation in 1999, CNT was
absorbed into the Government's Regeneration Agency, English Partnerships.
The vision of the enlarged organisation is to be ". . . the
national force for regeneration and development (working) in partnership
to create new jobs and new investment through sustainable economic
regeneration and development in the English Regions". The
remit, as set out in the English Partnerships Corporate Plan for
2001-02 to 2003-04 is, amongst other things to ". . . complete
the development of the new towns for the benefit of all those
who live and work in them".

In practice, English Partnerships has proved
to be an unhappy marriage between CNT and the Urban Regeneration
Agency giving rise to a corporate schizophrenia which has acted
against the interests of the new towns. English Partnerships has
a contradictory brief. It is required to dispose of the EP assets
at the best price for land and property and return the government's
investment to the public purseie act in the interests of
the Treasury and the Taxpayer. At the same time it is required
to take into account the interests of the local communityie
people living, working or carrying on business in the New Towns.
In practice EP has satisfied the first part of the brief and disregarded
the second. The new towns have effectively been asset-stripped
as a result.

The former CNT's property disposal policy has
created situations of multiple ownership which make it extremely
difficult for the local authorities to undertake development-led
regeneration. The clearest example is in the town centres. They
are suffering from the decline brought about by out of town shopping
developments, but this cannot be addressed easily when property
is now in the ownership of many different organisations creating
almost insuperable problems when trying to negotiate redevelopment
schemes.

A number of specific difficulties have been
experienced in dealings with EP and the former CNT:

 In most cases, the normal principles
of selling land do not seem to apply and deals are generally on
inflexible terms, which may be difficult for local authorities
to comply with.

 Negotiations between the local authorities
and CNT can be unreasonably prolonged. During such negotiations
personnel and targets change, preventing quick resolution.

 The remaining EP assets are now of
minimal commercial value but the CNT owns clawback, restrictive
covenants and ransom strips which severely inhibit the work of
the Local Authorities in developing their towns.

 EP tends only to invest in areas
from which it derives income. This is despite that fact that the
majority of the profit from sale of land in the towns has gone
to the Treasury over the years. In Stevenage, EP now holds very
little land of any significant value.

The following action is now needed from Government:

1. Disengage EP from the new towns and transfer
the property assets in them to the appropriate local authority
preferably free of any obligations, but failing this with an arrangement
for clawback by the Treasury on disposal.

2. Pending completion of the transfer of
assets a major proportion of the income from sales of EP assets
in the new towns should be reinvested in new town renewal.

It should be noted however, that because EP
has virtually completed its disposal programme in Stevenage, the
funds that would be released by any asset transfer would not be
sufficient to finance the Council's maintenance deficit or its
regeneration programme.

The East of England Development Agency (EEDA)
as the Regional Development Agency provides welcome assistance
to parts of Stevenage through its administration of the SRB programme.
EEDA could also have a role to play as an intermediary in providing
the capital investment needed to support physical regeneration
initiatives in the new towns, given a sufficient allocation of
resources by Government. There are, however, two major constraints.
First, EEDA is under-funded in comparison to other RDAs. Secondly,
Stevenage is peripheral to the eastern region and it is clear
that, with limited resources available to it across a large region,
the EEDA's current priorities lie elsewhere. In the event of a
major restructure of English Partnerships, the Council therefore
prefers the options outlined above to a transfer of assets to
the RDA.